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Statistics on the Value and Importance of Intellectual Property

How important is intellectual property?

Intellectual property is an economic driver in Canada, the U.S. and Europe:

51% of Canada's economy is represented by knowledge-based industries; over time, Canada is becoming increasingly dependent on industries of intangible goods and industries propelled by research and development.

As of 2008, innovative property composed 31.2% of all intangible wealth in Canada, amounting to $47 billion; this proportion continues to grow as intangible industries expand and tangible industries experience little to no change.

IP industries account for over 1/3 of the total GDP of the U.S. and for almost ¾ of the U.S.'s exports; the value of America's intellectual property exceeds $5.8 trillion.

Intangible assets account for 70% of firm assets and over 70% of equity value in the United States; the figure is similar for other developed countries.

Intellectual-property intensive industries contribute 26% of the EU's employment and 39% of the EU's GDP; 90% of EU exports and 88% of EU imports consist of products manufactured in IPR-intensive industries.

Intellectual property helps workers and businesses:

There is a wage premium in intellectual property-intensive industries; it is highest for patent and copyright-intensive industries, but considerable for trademark-intensive industries; the wage premium can often exceed 30% when compared to average market wages.

The value of intellectual property for Fortune 500 Companies exceeds 65% on average, and exceeds 90% for certain companies within the group.

Among the most innovative firms in Canada (world-first innovation), the rate of acquiring intellectual property is over 90%.

Intellectual property can account for over 40% of the average business, and is often not reflected on their balance sheet.

However, 67% of U.S. companies own technological assets that they are failing to exploit and that are potentially eligible for intellectual property protections (valued up to $1 trillion).

How can obtaining patents help your business?

The quality of Canada's patents exceeds any other country in the G-7 except the U.S., with patents being extremely significant on the overall growth trend of knowledge industries.

Acquiring patents could help you attract quality talent: the patent sector is responsible for 1/5 of all jobs in Canada; companies who have applied for and been granted patents have been proven to have higher employment and wage rates compared to their industry counterparts.

Obtaining a patent can gear you toward global export: the patent sector in Canada is heavily oriented toward external markets; exports of intangible assets are highly valued across the world.

Getting a patent could help you stay in business: firms that applied for at least one patent have a 14% lower chance of exiting the market over a 5-year period than firms inactive with intellectual property rights, all other variables equal.

How can registering your trademarks help your business?

Trademarks are low cost intellectual property assets, and as such, an investment in a trademark is a worthwhile endeavor even for a very small firm.

Getting a trademark registration for your business or trade name could help you stay in business: applying for a trademark registration prolongs the lifespan of a firm by 6.6 years on average; applying for a renewal of a trademark registration further extends that lifespan; further, firms that applied for at least one trademark registration have a 16% lower chance of exiting the market over a 5-year period than firms inactive with intellectual property rights, all other variables equal.

Trademark registrations can increase your profits: the enhanced trademark protection granted by registering your trademarks raises firm profitability by 1.7% and firm value by 11.9%, relative to matched and industry year adjusted control firms; it is also proven that investors assign higher values to companies with larger trademark portfolios.

Trademark registrations can help you leverage firm assets, emphasize the importance of the trademark to insiders and outsiders, and improve the marketability of firm assets.

However, small firms are consistently behind on capitalizing on trademark benefits: only 30% of small firms have applied for trademark registrations, as compare to over 90% of large ones.